Facebook Blogging

Edward Hugh has a lively and enjoyable Facebook community where he publishes frequent breaking news economics links and short updates. If you would like to receive these updates on a regular basis and join the debate please invite Edward as a friend by clicking the Facebook link at the top of the right sidebar.

Thursday, October 24, 2002

CHINA GOES GLOBAL

Economic growth in the third quarter of this year was again driven by globalization processes. Foreign direct investment utilization, for example, surged 30.2% Year onYear to US$15 billion (to 4.7% of GDP) while exports grew by 28.5% (domestic consumer demand growth, on the other hand, lagged amid increased savings due to fears over job security- produced by the shake outin the state sector -and rising service costs). The incremental export-to-GDP ratio rose to a record 89.6%, indicating the dependence on external demand. The expansion of foreign-invested enterprises was evident, given their 13.6% growth in value-added output. Overall production for export delivery jumped 25.2% YoY in 3Q, accelerating from 22.3% in 2Q. This exceeds overall industrial output growth of 13.1% and 12.5%, respectively, for 3Q and 2Q. Put simply structurally based, export lead growth in China is now one of the leading motors driving the increase in global consumption, and one of the key factors in understanding the downward, deflationary presseure on prices.

After the robust September trade and production data released yesterday, China unveiled the full 3Q02 economic report today. Real GDP expanded 8.1% YoY, in line with expectations, up from 8% in 2Q and 7.6% in 1Q. Although growth could ease in 4Q02, as global demand slows and shipments have been disrupted by the West Coast ports strike, we believe we are on track to reach our 7.8% growth forecast for the year. Nominal GDP growth continued to track below real GDP growth, illustrating persistent deflationary pressure. The economy expanded 7.7% YoY in nominal terms, 0.4 percentage points below the real growth rate, although that gap has narrowed from 1.5 percentage points in 2Q.
Source: Morgan Stanley Global EConomic Forum
LINK

Eastern Europe Economy Watch

United States

Edward's Website

About

Edward 'the bonobo' is a Catalan economist of British extraction based in Barcelona. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

He is currently working on a book with the provisional working title "Population, the Ultimate Non-renewable Resource".

Apart from his participation in A Fistful of Euros, Edward also writes regularly for the demography blog Demography Matters. He also contributes to the Indian Economy blog . His personal weblog is Bonobo Land . Edward's website can be found at EdwardHugh.net.